Intermediate Macroeconomics Econ 304
Final UPDATED ACTUAL Exam
Questions and CORRECT Answers
Nominal GDP measures the value of goods and services in ____ Prices, While real GDP
measures the value of goods and services in ____ Prices - CORRECT ANSWER✔✔-
Current; Constant
Two Equivalent ways to view GDP are as the: - CORRECT ANSWER✔✔- total income of
everyone in the economy or the total expenditure on the economy's output of goods and
services
Since the GDP includes only the additions to income, not transfers of assets, ____ are not
included in the computation of GDP. - CORRECT ANSWER✔✔- Used goods
The investment components of GDP includes all of the following except; - CORRECT
ANSWER✔✔- purchases of corporate stock
An increase in the price of imported goods will show up in: - CORRECT ANSWER✔✔- the
CPI but not the GDP deflator
People are considered to be unemployed if they: - CORRECT ANSWER✔✔- do not have a
job, but have looked for one in the past 4 weeks
In the long run the level of national income in an economy is determined by its: - CORRECT
ANSWER✔✔- factors of production, and production function
According to the neoclassical theory of distribution, total output is divided between payments
to capital and payments to labor depending on their: - CORRECT ANSWER✔✔- Marginal
Productivity
Consumption depends on ___ on disposable income, and investments depends ___ on the real
interest rate: - CORRECT ANSWER✔✔- Positively: negatively
, government transfer payments: - CORRECT ANSWER✔✔- can be viewed as negative tax
payments, T.
In the classical model with fixed income, if the demand for goods and services is less than the
supply, the interest rate will: - CORRECT ANSWER✔✔- Decrease
According to the model developed in chapter 3, when government spending increases without
change in taxes - CORRECT ANSWER✔✔- investment decreases
Money has no value other than as money is called ___ money - CORRECT ANSWER✔✔-
Fiat
Economists use the term money to refer to: - CORRECT ANSWER✔✔- assets used for
transactions
In a fractional- reserve banking system, banks create money when they: - CORRECT
ANSWER✔✔- Make Loans
The use of borrowed funds to supplement existing funds for purpose of investment is called: -
CORRECT ANSWER✔✔- Leverage
The money supply will increase if the: - CORRECT ANSWER✔✔- monetary base increases
To increase the monetary base the fed can: - CORRECT ANSWER✔✔- conduct open-
market purcahses
If velocity is constant and in addition the factors of production and the production function
determine the real GDP, then: - CORRECT ANSWER✔✔- the price level is proportional to
the money supply
The inflation tax is paid: - CORRECT ANSWER✔✔- by all holders of money
Final UPDATED ACTUAL Exam
Questions and CORRECT Answers
Nominal GDP measures the value of goods and services in ____ Prices, While real GDP
measures the value of goods and services in ____ Prices - CORRECT ANSWER✔✔-
Current; Constant
Two Equivalent ways to view GDP are as the: - CORRECT ANSWER✔✔- total income of
everyone in the economy or the total expenditure on the economy's output of goods and
services
Since the GDP includes only the additions to income, not transfers of assets, ____ are not
included in the computation of GDP. - CORRECT ANSWER✔✔- Used goods
The investment components of GDP includes all of the following except; - CORRECT
ANSWER✔✔- purchases of corporate stock
An increase in the price of imported goods will show up in: - CORRECT ANSWER✔✔- the
CPI but not the GDP deflator
People are considered to be unemployed if they: - CORRECT ANSWER✔✔- do not have a
job, but have looked for one in the past 4 weeks
In the long run the level of national income in an economy is determined by its: - CORRECT
ANSWER✔✔- factors of production, and production function
According to the neoclassical theory of distribution, total output is divided between payments
to capital and payments to labor depending on their: - CORRECT ANSWER✔✔- Marginal
Productivity
Consumption depends on ___ on disposable income, and investments depends ___ on the real
interest rate: - CORRECT ANSWER✔✔- Positively: negatively
, government transfer payments: - CORRECT ANSWER✔✔- can be viewed as negative tax
payments, T.
In the classical model with fixed income, if the demand for goods and services is less than the
supply, the interest rate will: - CORRECT ANSWER✔✔- Decrease
According to the model developed in chapter 3, when government spending increases without
change in taxes - CORRECT ANSWER✔✔- investment decreases
Money has no value other than as money is called ___ money - CORRECT ANSWER✔✔-
Fiat
Economists use the term money to refer to: - CORRECT ANSWER✔✔- assets used for
transactions
In a fractional- reserve banking system, banks create money when they: - CORRECT
ANSWER✔✔- Make Loans
The use of borrowed funds to supplement existing funds for purpose of investment is called: -
CORRECT ANSWER✔✔- Leverage
The money supply will increase if the: - CORRECT ANSWER✔✔- monetary base increases
To increase the monetary base the fed can: - CORRECT ANSWER✔✔- conduct open-
market purcahses
If velocity is constant and in addition the factors of production and the production function
determine the real GDP, then: - CORRECT ANSWER✔✔- the price level is proportional to
the money supply
The inflation tax is paid: - CORRECT ANSWER✔✔- by all holders of money
